- Netflix shares are expected to have double-digit growth according to new Wall Street forecasts.
- Seaport Research Partners raised its price target for Netflix from $1,230 to $1,385 per share.
- Recent stock declines followed a boycott driven by Elon Musk and subscription cancellations, resulting in a market cap drop.
- Analysts cite strong growth potential for Netflix’s ad business and new low-cost subscription tier.
- Despite recent losses, Netflix stock is up 34% year-to-date.
Netflix received an upgraded price target from Seaport Research Partners on Monday, following recent drops in share value due to a subscriber boycott. Analyst David Joyce moved Netflix stock to Buy from Neutral, raising the price forecast to $1,385 per share. The stock last traded at $1,186.
The upgrade came after Netflix shares fell as much as 9%, which the article attributes to broad user cancellations connected to an Elon Musk-led boycott. This led to a loss of over $20 billion in market capitalization for the streaming company. Still, some Wall Street analysts see the potential for a rebound and further growth.
Joyce explained that he believes Netflix is positioned for significant growth in its advertising business, following strong gains earlier this year. “We think the shares’ momentum, which has moderated lately, could be digesting the [year-to-date] +30% gains ahead of the advertising infrastructure build-related monetization momentum,” Joyce wrote. He said Netflix is closer to growing its ad-supported tier, with projections that advertising revenue could double to $3.1 billion this year and may reach as high as $16 billion by 2030.
Last year, Netflix reported $39 billion in revenue, a 16% increase from the previous year. Joyce acknowledged some concerns around competition from larger streaming services like Amazon Prime, which in some regions have advanced faster in ad and content partnerships. Still, he expects Netflix’s content to continue supporting the company’s expansion. The article notes that the stock remains up 34% so far this year despite being down 4% in the past month. For more on the boycott and market impact, see Netflix Plunges Another 9% After Musk’s Boycott Shaves $25B Off Market Cap.
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